Silver (XAG/USD) extended its decline on Thursday, falling 1.23% to trade around $63.65, as hawkish signals from the Federal Reserve pushed US Treasury yields sharply higher [1]. The selloff accelerated after New York Fed President John Williams stated that another interest-rate increase this year remains possible, emphasizing the need to bring inflation back toward the Fed's 2% target promptly [1]. This reinforced market expectations for further tightening, with the CME FedWatch tool indicating a 71% chance of another rate hike at the October meeting, up from 55% a week earlier [1].
The benchmark 10-year US Treasury yield surged toward 5.15% on Thursday, marking its highest level since 2007 [1]. Rising bond yields increase the opportunity cost of holding non-yielding assets like silver, while the strengthening US Dollar added further pressure on the metal [1].
US labor market data released Thursday showed resilience, with Initial Jobless Claims declining slightly to 197K from a revised 198K, beating expectations of 201K. Continuing Jobless Claims edged up to 1.719M from 1.717M, remaining below the 1.75M forecast. These figures suggest limited grounds for the Fed to adopt a more accommodative stance [1].
Technical analysis indicates that XAG/USD maintains a bearish near-term bias, trading at $63.61 below both the 100-period SMA ($65.77) and 200-period SMA ($64.90). Resistance is seen at $64.00 and $64.56, while support levels are at $63.33, $62.85, and $62.30. The Relative Strength Index (14) at 27.85 signals oversold conditions, which could slow immediate selling but does not guarantee a sustained recovery [1].
CONCLUSION
Silver prices are under heavy pressure due to rising US Treasury yields and a hawkish Fed outlook, with technical indicators pointing to continued downside risk. Market expectations for further rate hikes have increased, and resilient labor data offers little support for a policy shift. The short-term outlook for silver remains bearish unless buyers emerge at key support levels.